French clubs weigh up impact of Altice's financial slide

Soccer - 17 Nov 2017

Author: Martin Ross

By Martin Ross

French soccer clubs have been digesting the news of Altice’s significant share price drop, hoping that any scaling back on content from the telecoms giant does not affect a bid for broadcast rights to the top two divisions.

Shares in Altice’s Amsterdam-based holding company have fallen by over 40 per cent since the reporting of weak third-quarter financial results on 2 November, and, with the telecoms group's debts standing at €49.6 billion ($58.5 billion), observers are pondering the impact on any rights bid by subsidiary SFR Sport, the pay-TV broadcaster.

Priority will now be given to reducing the debt, according to Dennis Okhuijsen, Altice’s chief financial officer, as the company shifts its focus back to the “basics.”

Ligue 1 clubs have been looking on longingly at Altice’s sports rights investments, including the €115-million-per-season agreement for Premier League rights and the acquisition of Uefa Champions League and Europa League rights in a three-year, €1.05-billion deal.

However, Altice’s financial challenges have prompted reflection among some, with Jean-Michel Aulas, Lyon’s president, telling L’Equipe: “SFR will perhaps take a bit of time to become an investor again. This reinforces the idea that you have to be very careful. We feel that the Altice group could take a break.”

League bosses had been toying with the idea of a snap rights auction in order to maximise competition between pay-TV trio BeIN Sports, Canal Plus and SFR Sport, but opted to wait until at least the first quarter of 2018, and with SFR said to have asked for time to put its plans in order.

Aulas added: “They bought the exclusive Champions League and Europa League rights, but that does not mean that they will go for all rights.”

Claude Michy, president of Ligue 2 outfit Clermont, remarked: “Their situation today is a little different to that eight days ago. Things moves pretty fast in this world. Not long ago, SFR was God. And today, you’re saying that their situation is catastrophic.

“The business world is like that. There are periods when you have to know how to wait.”

Ligue 1 and Ligue 2 rights in the current cycle (2016-17 to 2019-20) were sold to BeIN Sports and Canal Plus for a total of €748.5 million per season, and the clubs are targeting at least €1 billion per season from 2020-21 onwards.

Canal Plus bought three Ligue 1 rights packages (including the top two packages) in the 2014 auction, paying €540 million per year and keeping the top games. BeIN picked up rights to three packages for €186.5 million per season as the value of Ligue 1's domestic rights rose by 20 per cent in comparison to the previous cycle.

Bernard Caïzzo, the Saint-Etienne president, admitted that developments at SFR were “not good news”, but questioned the size of the 42-per-cent fall in share price when “looking at fundamental economic parameters.”

However, Saïd Chabane, president of Angers, appears less concerned, claiming: “This stock market tumble is not what will kill SFR. It is a long-standing player in the telephony market. I have no worries. It will bounce back very quickly. When you have lots of grain in the granary, you can withstand hard winters and storms.”

Chabane, Caïzzo and Michy all sit on the French league’s media rights steering committee.

Last week, Altice chief executive Michel Combes resigned on the back of the share value loss, with Alain Weill (pictured), named as the new head of the SFR group, and founder Patrick Drahi taking back more control.

Meanwhile, France’s Telesatellite website has claimed that Altice is on the brink of launching a satellite DTH platform in France, to sit alongside SFR’s existing cable and IPTV offerings.